Kia's counterattack will be to "penetrate the luxury market," Lee said. "We do not call it the premium market. The luxury market, for example the BMW 5, the BMW 7 market."

The Kia Optima SXL jumps in price.

Kia is riding great momentum, thanks to improved quality, competitive technology and eye-catching styling. But the K900 -- which shares the same platform as the $62,170 (including shipping) Hyundai Equus -- marks its most ambitious gambit in remaking its reputation.

"We have changed our position from follower to challenger," Lee said. "Our next goal will be being a mainstream brand. To be a mainstream brand, we need more profitable customers."

In his sights are VW and Toyota, the two brands Lee benchmarks most. But the K900's objective is to siphon customers in the $80,000 to $110,000 income bracket from brands such as Audi or BMW.

The move carries risks. Through April, Kia sold 365 K900s in the United States. While it is too soon to gauge customers' long-term reaction to a Kia that costs $60,400, including shipping, the pace is off the 5,000 annual units executives forecast to dealers last fall.

Volkswagen famously fumbled when it brought its top offering, the Phaeton, to the United States in 2003, only to pull the plug amid tepid sales. And Kia doesn't have the benefit of VW's brand image.

"They've had a reputation for inferior quality," said Eric Lyman, vice president of industry insights at TrueCar. "Now they are making great competitive products. But they are pushing up into new segments with the baggage of the previous reputation."

Last year, Kia's U.S. sales fell 4 percent to 535,179 units. Through April, however, they were up 7 percent to 186,682.

Lee says there is room to go higher:

"Our positioning is not the same as premium brands, but we have to maintain our own territory and at the same time, we can grow slightly into upper categories," he said. "It does not mean we can compete with premium brands, but just expand our footprint."

The first SXL was the Sorento crossover, offered in the summer of 2011. An SXL package for the Optima followed in 2012.

The Sorento SX-L starts at $40,795, a huge jump from the base version, at $24,995. Likewise, there is a lot of distance between the $36,100 Optima SXL and $22,300 entry model. Those prices all include shipping.

"We wanted to introduce the K900 to the USA, so we needed some bridge," Lee said. "Otherwise, the price gap is too high."

Kia will extend SXL packaging to other nameplates above the Forte compact sedan and to markets outside the United States, Lee said. This year's redesigned Sedona minivan also gets SXL.

Tough climb

Kia did not say what percentage of customers opts for SXL trim. But the option has brought more affluent customers into the showrooms and helped boost transaction prices by 30 percent during the last five years, Kia spokesman Michael Choo said.

It may take awhile for Kia to gain traction, TrueCar's Lyman said. Case in point: The Kia Cadenza, a full-sized sedan between the Optima and K900. The Cadenza starts at $35,900 with shipping.

After it went on sale last year, Kia offered $2,000 in incentives and dealers had a 40-day supply, Lyman said. Now, Kia is doling out $3,750, and the Cadenza is backed up to 70 days.

"It can take three to five years to change perception," he said. "You need to reach a critical mass with a large number of consumers having a positive opinion of the brand. You need the vehicles to proliferate in both the new- and used-car markets."

Despite the addition of SXL trims and the Cadenza, Kia's average transaction price has dropped to about $22,170, from $23,199 two years ago, according to Kelley Blue Book. Meanwhile, incentive spending has risen to $2,188, from $1,666.

But over the past several years, Kia has seen a steady uptick in transaction prices, notes KBB senior analyst Alec Gutierrez.

"Prices have declined slightly in recent months due to increased competition in the compact and mid-size segments," he said. "However, the addition of a range-topping K900 should help to push overall transaction prices up slightly over time."

Bottlenecks

In the meantime, Kia's image is still tied to value. In April, for example, it won Kelley Blue Book's Brand Image Award for "Best Brand Value." Said KBB: "Kia vehicles are well-known for offering more features per dollar than most of the competition."

Cho said last year's 4 percent decline in U.S. sales reflected supply bottlenecks, not problems with brand perception.

For example, Kia still has to import part of its U.S. supply of Optimas from South Korea. But Korean output has to be rationed for all global markets, meaning the United States can't always get enough.

"We couldn't get enough supply. In the case of the Optima and Sportage, we still need more volume," Cho said.

Lee said Kia won't rush to add capacity. It added 300,000 units this year by opening a third plant in China. But other new output likely will come through streamlining existing operations.

When it comes time for a new factory, Lee suggested China would be first in line. China is expected to be Kia's fastest growing market through 2016, he said, and it will surpass the United States this year as the brand's biggest.